New Delhi, Nov. 9 -- Federal Reserve Chair Jerome Powell agrees that there's probably something to the claims of a K-shaped economy. But at last week's press conference, he failed to note how the Fed has helped to create it-and the implications it has for monetary policy.

"If you listen to the earnings calls or the reports of big, public, consumer-facing companies, many of them are saying that there's a bifurcated economy there and that consumers at the lower end are struggling and buying less and shifting to lower cost products," Powell said last week. "But that at the top, people are spending at the higher income and wealth."

With its restrictive interest rates in recent years, the Fed has contributed to this bifurcation. Specific dem...